Beginning in March 2015, New York State consumers will be able to tell debt collectors to contact them by email and not over the phone, according to new state regulations that the New York Department of Financial Services released Wednesday.

Many see New York's move as a potential foreshadowing of federal debt collection regulations the CFPB expressed an interest in developing last year but, so far, has not formally proposed.

In addition to allowing consumers the option of limiting their communication with debt collectors to email, the new rules also require debt collectors “substantiate” that the consumer actually owes the debt and inform the consumer if there is reasonable chance that the statute of limitations on the debt they are collecting has expired.

“Here in New York we will not tolerate debt collectors who wrongfully take advantage of consumers,” New York Governor Andrew Cuomo said when announcing the new rules. “That's why we're rolling out tough new regulations that protect borrowers and help crack down on illegitimate debt collection practices. These new tools and disclosures will protect New Yorkers across the state, and I am pleased that our administration is leading the way on this issue.”

“The debt collection industry is filled with far too many unscrupulous actors willing to deceive and abuse consumers just to make a quick buck. These important reforms will provide significant, new protections for financially struggling New Yorkers from harassment and fraud, and help us root out these predatory practices,” Benjamin Lasky, Superintendent of Financial Services added.

The substantiation requirement will help consumers be able to determine the validity of the debt during any point in the collection process, the department explained.

Currently, consumers must dispute the debt in writing and request verification within 30 days of the first collection attempt, the Department explained. Under the new regulations, a consumer can request substantiation of the debt at any time during the collections process.

Some consumers do not understand the 30-day window and this rule change effectively expands it, the department said. Once a debt collector receives a substantiation request, the debt collector must cease collection and provide documentation proving the validity of the debt and the creditor's right to collect that debt within 60 days. 

The notification that the statute of limitations may have expired is meant to help consumers confronted by debt collectors trying to collect on what the department called “zombie debt”, which is debt older than its legal statute of limitations.

Some debt collectors collect on debts for which the statute of limitations has already expired, the department asserted. If a collector attempts to collect on a debt for which the statute of limitations has expired, prior to accepting payment, the collector must provide notice that they believe the statute of limitations may be expired, the department added. The debt collector must also tell the consumer that, if sued on such a debt, the consumer may be able to prevent a judgment by informing the court that the statute of limitations has expired.